US Court Rejects Argentina Default Payment

A US appeals court has rejected a request from defaulted creditors led by Elliott Associates, a US fund, to require Argentina to post security of at least $250m by Monday to demonstrate its willingness to pay any judgment in their favour, the Financial Times reported. The ruling from the Second Circuit Court of Appeals means there will be no change to a schedule it laid down last week for the thorny case, which has pit the government against funds it decries as “vultures” and sparked fears of a new Argentine default. The case has important ramifications for the international financial system and future sovereign restructurings. Argentina is appealing against a November 21 ruling by New York Judge Thomas Griesa, ordering it to pay $1.3bn to the defaulted creditors under the pari passu, or equal step, clause in the bonds which Argentina has not paid since crashing to the world’s biggest sovereign default on almost $100bn in 2001. The appeals court has scheduled a hearing for February 27. Read more. (Subscription required.)